Telecommunications Companies Propose 100 per cent Tariff Increase, Await Govt Approval Despite Economic Hardship

Nigerian telecommunications companies have proposed a 100 per cent increase in service tariffs, citing rising operational costs driven by inflation, volatile exchange rates, and escalating energy prices.

The proposal, which has been submitted to the Nigerian Communications Commission (NCC), awaits regulatory approval.

MTN Nigeria’s Chief Executive Officer, Karl Toriola, disclosed this development during an interview on Arise TV on Thursday. He explained that the proposed hike aims to address the significant financial pressures telecom operators are facing to ensure the industry’s sustainability.

We’ve put forward requests of approximately 100 per cent tariff increases to regulators,” Toriola said. “I doubt they’re going to approve that quantum of increases because they are very, very sensitive to the current economic situation in the country.

The CEO underscored that the focus of the proposal is not on short-term profitability but on ensuring the long-term stability of the telecom sector.

We’re united because we share concerns about a few fundamental issues,” he stated. “Without a sustainable industry, the broader economy and the well-being of the people will be negatively impacted.”

It will be recalled that Telecom operators have warned of imminent service disruptions unless tariffs are increased to match rising operational expenses.

The Chairman of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), Gbenga Adebayo, described the telecom sector as “under siege.”

He highlighted that despite inflationary pressures and increased costs for power generation and raw materials, service tariffs have remained unchanged, leaving operators struggling to maintain quality service and expand their networks.

This proposal is coming after the Nigerian government had proposed a 5 per cent excise duty on telecommunications, gambling, and gaming services.

This proposal is included in the new “Nigeria Tax Act” bill, which was submitted to the National Assembly on October 4, 2024.

The bill aims to impose excise duties on services provided in Nigeria, including both postpaid and prepaid telecom services regulated by the Nigerian Communications Commission (NCC), as well as gaming, gambling, and lottery activities.

According to the document, all transactions related to these services will attract the 5 per cent excise duty once the bill is passed.

The tariff increase and tax proposal are coming at a time when Nigerians are grappling with skyrocketing living costs, driven by a hike in fuel prices that has triggered sharp increases in transportation, food, and other essential expenses. Such an increase in tariffs will add another layer to the high cost of living for the citizens.

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